Posted To: MBS Commentary
Bond markets capped a rather unpleasant 2-day move today. While 10yr yields only rose 3.4bps by the close, the losses put us right back in the 1.52-1.62 range that dominated the 2 weeks leading up to last week’s Fed Announcement. Following the Fed, rates moved lower with apparent conviction, but that now looks like a head fake . The timing of the weakness is important, considering that tomorrow kicks off 3 busy days of important economic data (ADP and ISM Services in the morning, and of course, NFP on Friday). There’s some small chance that we’re simply seeing extra defensiveness on the part of traders due to a heavy week of corporate bond issuance . But even then, we’d likely need to see weaker economic data tomorrow if we hope to continue the fight to break back below the…(read more )